跨境通(002640) - 2018 Q2 - 季度财报

Section I Important Notice, Table of Contents, and Definitions This chapter presents standard disclaimers, board assurances of report accuracy, clarifies no profit distribution for H1 2018, and defines key business terms and company entities Important Notice, Table of Contents, and Definitions This chapter presents standard disclaimers, board assurances of report accuracy, clarifies no profit distribution for H1 2018, and defines key business terms and company entities - The company's board of directors, supervisory board, and senior management guarantee the truthfulness, accuracy, and completeness of this semi-annual report and bear corresponding legal responsibilities[3] - The company's H1 2018 profit distribution plan is: no cash dividends, no bonus shares, and no capital increase from capital reserves[5] - The report provides clear definitions for key subsidiaries (Globalegrow, Patoson, U1Buy) and core business terms (cross-border e-commerce, B2C)[10] Section II Company Profile and Key Financial Indicators This chapter provides company basic information and key financial data, highlighting rapid revenue and net profit growth in H1 2018, alongside increasing negative operating cash flow indicating expansion-related liquidity pressure Company Profile and Core Financial Data This chapter provides company basic information and key financial data, highlighting rapid revenue and net profit growth in H1 2018, alongside increasing negative operating cash flow indicating expansion-related liquidity pressure Key Financial Indicators for H1 2018 | Indicator | Current Period (CNY) | Prior Period (CNY) | YoY Change | | :--- | :--- | :--- | :--- | | Operating Revenue (CNY) | 9,874,821,438.16 | 5,571,814,317.16 | 77.23% | | Net Profit Attributable to Shareholders (CNY) | 506,991,067.21 | 314,897,926.40 | 61.00% | | Net Cash Flow from Operating Activities (CNY) | -163,681,006.62 | -51,969,247.96 | -214.96% | | Basic Earnings Per Share (CNY/share) | 0.34 | 0.22 | 54.55% | | Weighted Average Return on Net Assets | 8.27% | 7.20% | 1.07% | | Total Assets (CNY) | 12,008,847,496.52 | 8,600,944,382.85 | 39.62% (Period-end vs. Prior Year-end) | | Net Assets Attributable to Shareholders (CNY) | 7,059,316,486.74 | 4,866,318,515.35 | 45.06% (Period-end vs. Prior Year-end) | - Total non-recurring gains and losses for the reporting period amounted to 32.6045 million yuan, primarily from government subsidies and investment income[20][21] Section III Business Overview The company specializes in cross-border e-commerce, with growth driven by enhanced operational quality and the U1Buy acquisition, leveraging core competencies in big data, international teams, and proprietary brands Business Model and Core Competencies The company specializes in cross-border e-commerce, with growth driven by enhanced operational quality and the U1Buy acquisition, leveraging core competencies in big data, international teams, and proprietary brands - The company's main businesses include cross-border export (proprietary B2C websites and third-party platforms) and cross-border import (online distribution and direct sales)[25][26] - Performance growth in the reporting period was mainly due to enhanced core competencies and the consolidation of U1Buy's performance (from February 2018), which contributed new profit growth[27] - The company's core competencies include: big data operation management, leading international team, proprietary brands (e.g., MPOW, ZAFUL) with full supply chain management, technology R&D, and online marketing advantages[29][30][31] - During the reporting period, the company's proprietary brand revenue reached 3.487 billion yuan, accounting for 35.31% of total revenue[30] Section IV Management Discussion and Analysis (MD&A) This section provides an in-depth analysis of the company's operations, financial performance, asset and liability status, investment activities, and future outlook I. Overview The company achieved rapid overall performance growth in the reporting period, with significant revenue and net profit increases, navigating the expanding global cross-border e-commerce market while addressing challenges like logistics and talent shortages H1 2018 Performance Overview | Indicator | Amount (CNY '0000) | YoY Growth | | :--- | :--- | :--- | | Operating Revenue | 987,482.14 | 77.23% | | Operating Profit | 62,493.12 | 49.49% | | Net Profit Attributable to Shareholders | 50,699.11 | 61.00% | - The company identified four major constraints in the cross-border e-commerce industry: mismatched logistics systems, inadequate after-sales service, imperfect regulatory systems, and a shortage of professional talent, and has taken corresponding measures to address them[36][38][39] Key Proprietary Website Operational Data (As of June 2018) | Indicator Name | GearBest | ZAFUL | Rosegal | | :--- | :--- | :--- | :--- | | Registered Users (Millions) | 35.85 | 16.94 | 15.01 | | Monthly Active Users (Millions) | 42.36 | 24.01 | 20.18 | | 90-day Repurchase Rate (%) | 43.2 | 27.3 | 33.7 | | Average Monthly Order Value (USD) | 53.6 | 48.9 | 36.8 | II. Main Business Analysis The company's main business achieved comprehensive growth, driven by sustained e-commerce operations and the consolidation of U1Buy, with e-commerce revenue accounting for 99.19% of total revenue and domestic market growth accelerating due to U1Buy's integration Key Financial Data Year-on-Year Changes | Item | Current Period (CNY) | YoY Change | Main Reason for Change | | :--- | :--- | :--- | :--- | | Operating Revenue | 9,874,821,438.16 | 77.23% | Consolidation of U1Buy's performance and growth in existing businesses | | Operating Cost | 5,928,474,022.82 | 104.14% | Consolidation of U1Buy's performance and growth in existing businesses | | Financial Expenses | 102,852,230.65 | 312.27% | Increase in interest expenses due to increased debt | | Net Cash Flow from Operating Activities | -163,681,006.62 | -214.96% | Higher payments for supplier goods, marketing, logistics, etc | | Net Cash Flow from Financing Activities | 1,034,674,452.19 | 1,417.49% | Funds raised for U1Buy acquisition | - During the reporting period, U1Buy was consolidated into the company's scope, adding 142 million yuan in net profit, with its main business being maternal and infant product sales, leading to a significant change in the company's profit sources[71] Operating Revenue Composition (by Product) | Product Category | Operating Revenue (CNY) | Proportion of Total Revenue | | :--- | :--- | :--- | | Electronic Products | 5,257,148,289.37 | 53.24% | | Maternal and Infant Products | 2,517,444,280.86 | 25.49% | | Apparel and Home Furnishings | 1,758,371,803.20 | 17.81% | | Other Products | 341,857,064.73 | 3.46% | IV. Analysis of Assets and Liabilities As of the period-end, total assets reached 12.009 billion yuan, a 39.62% increase from the prior year-end, primarily due to the U1Buy acquisition, which significantly impacted accounts receivable, inventory, short-term borrowings, and accounts payable Major Balance Sheet Item Changes | Item | Period-end Amount (CNY) | Proportion of Total Assets | Explanation of Change from Prior Year-end | | :--- | :--- | :--- | :--- | | Accounts Receivable | 1,511,599,991.60 | 12.59% | Due to acquisition and consolidation of U1Buy | | Inventory | 4,513,163,225.23 | 37.58% | Due to acquisition and consolidation of U1Buy | | Short-term Borrowings | 1,597,089,933.55 | 13.30% | Increased external financing due to increased working capital needs | | Accounts Payable | 781,277,092.74 | 6.51% | Due to acquisition and consolidation of U1Buy | V. Investment Analysis The company's primary investment was the U1Buy acquisition, funded by raised capital, alongside acquiring the remaining 10% of Patoson, with some raised funds reallocated to support cross-border export B2B business development - During the reporting period, the company acquired a 10% equity stake in Shenzhen Qianhai Patoson Network Technology Co., Ltd. for 270 million yuan of its own funds, completing the industrial and commercial change on April 3, 2018[84] - The company raised a total of 2.678 billion yuan through non-public stock issuance and asset acquisition via share issuance, with 857 million yuan invested in the reporting period, and a cumulative investment of 2.296 billion yuan[88] - To focus on advantageous businesses, the company reallocated 360 million yuan from the 'Cross-border Import E-commerce Platform Construction Project' to the 'Cross-border Export B2B E-commerce Platform Construction Project' to increase resource allocation to export business[92][95] VII. Analysis of Major Holding and Participating Companies Core profits are derived from wholly-owned subsidiaries Globalegrow, Patoson, and U1Buy, with Globalegrow remaining the largest contributor and U1Buy becoming a significant growth engine after contributing 142 million yuan in net profit during its five-month consolidation Major Subsidiary Operating Performance for H1 2018 | Company Name | Operating Revenue (CNY) | Net Profit (CNY) | | :--- | :--- | :--- | | Shenzhen Globalegrow E-commerce Co., Ltd. | 5,831,504,688.60 | 355,580,830.20 | | Shenzhen Qianhai Patoson Network Technology Co., Ltd. | 1,461,062,963.31 | 126,518,833.22 | | Shanghai U1Buy E-commerce Co., Ltd. | 2,641,923,847.95 | 142,051,440.03 | - Shanghai U1Buy E-commerce Co., Ltd. became a wholly-owned subsidiary through acquisition during the reporting period, and its performance from February to June was consolidated, adding 142 million yuan in net profit to the company[100] IX. Forecast of Operating Performance for January-September 2018 The company forecasts net profit attributable to shareholders for Q1-Q3 2018 to grow by 50% to 80%, reaching 743 million to 892 million yuan, driven by continued cross-border e-commerce growth and U1Buy's consolidation - Expected net profit attributable to parent company shareholders for January-September 2018 to increase by 50% to 80%, ranging from 743 million yuan to 892 million yuan[102] - The main reasons for performance growth are the continued growth of the company's cross-border e-commerce business and the consolidation of U1Buy's business[102] Section V Significant Matters This section details key events including shareholder meetings, profit distribution plans, fulfillment of commitments, and major transactions such as the U1Buy acquisition and convertible bond issuance Shareholder Meetings, Profit Distribution, Commitment Fulfillment, and Major Transactions During the reporting period, the company held four shareholder meetings, decided against semi-annual profit distribution, fulfilled share lock-up and increase commitments, completed the major asset restructuring of U1Buy, and initiated a convertible bond issuance plan - The company plans no cash dividends, no bonus shares, and no capital increase from capital reserves for H1 2018[111] - The company's shareholders and senior management fulfilled their share lock-up and increase commitments during the reporting period[112] - The company completed the major asset restructuring of Shanghai U1Buy E-commerce, acquiring 100% equity through share issuance and cash payment, with the issuance of consideration shares and supporting fundraising shares completed in January and April 2018, respectively[147][150][151] - The company initiated a plan to publicly issue convertible corporate bonds, which has been approved by the shareholders' meeting[151][152] Section VI Share Changes and Shareholder Information The company's total share capital increased from 1.435 billion to 1.558 billion shares due to asset acquisition, supporting fundraising, and equity incentive exercises, with actual controllers Mr. Yang Jianxin and Ms. Fan Meihua holding partially pledged shares Share Structure Changes and Major Shareholders The company's total share capital increased from 1.435 billion to 1.558 billion shares due to asset acquisition, supporting fundraising, and equity incentive exercises, with actual controllers Mr. Yang Jianxin and Ms. Fan Meihua holding partially pledged shares - The company's total share capital increased from 1.435 billion shares to 1.558 billion shares, due to: new share issuance for asset acquisition (73.27 million shares), supporting fundraising (38.86 million shares), and equity incentive exercise (10.80 million shares)[156][157][158] Top Five Shareholders' Holdings (As of June 30, 2018) | Shareholder Name | Shareholding Percentage | Number of Shares Held (shares) | Number of Pledged Shares (shares) | | :--- | :--- | :--- | :--- | | Yang Jianxin | 18.19% | 283,360,500 | 219,380,000 | | Xu Jiadong | 17.56% | 273,622,032 | 182,790,023 | | Fan Meihua | 6.07% | 94,639,500 | 59,075,688 | | Deng Shaowei | 5.15% | 80,221,870 | 68,576,000 | | Li Pengzhen | 3.84% | 59,773,472 | 19,000,000 | - The company's actual controllers are Mr. Yang Jianxin and Ms. Fan Meihua, holding a combined stake of over 24%[173][474] Section VII Preferred Shares Information This section confirms that the company had no preferred shares during the reporting period Preferred Shares Information The company had no preferred shares during the reporting period - The company had no preferred shares during the reporting period[177] Section VIII Information on Directors, Supervisors, and Senior Management This section details changes in the company's senior management, including new appointments and significant shareholding changes for key executives Changes in Directors, Supervisors, Senior Management, and Their Shareholdings During the reporting period, the company appointed Zhou Min and Li Yanfang as Vice General Managers, with Vice Chairman and General Manager Xu Jiadong increasing his holdings and new Vice General Manager Zhou Min acquiring shares through the U1Buy acquisition - The company appointed Zhou Min and Li Yanfang as Vice General Managers on April 26, 2018[180] Changes in Shareholdings of Directors, Supervisors, and Senior Management | Name | Position | Shares Held at Beginning of Period (shares) | Shares Increased in Current Period (shares) | Shares Held at End of Period (shares) | | :--- | :--- | :--- | :--- | :--- | | Xu Jiadong | Vice Chairman, General Manager | 268,071,048 | 5,550,984 | 273,622,032 | | Zhou Min | Vice General Manager | 0 | 49,596,977 | 49,596,977 | Section IX Corporate Bonds Information This section confirms that as of the report approval date, the company had no outstanding or defaulted corporate bonds publicly issued and listed on a stock exchange Corporate Bonds Information As of the report approval date, the company had no outstanding or defaulted corporate bonds publicly issued and listed on a stock exchange - The company has no outstanding corporate bonds[183] Section X Financial Report This section provides the company's unaudited financial statements, including key accounting policies and detailed notes on consolidated financial statement items II. Financial Statements This section presents the company's unaudited consolidated and parent company financial statements, including balance sheets, income statements, cash flow statements, and statements of changes in owners' equity, showing total assets of 12.009 billion yuan and net profit of 506 million yuan for H1 2018 Consolidated Balance Sheet Summary (June 30, 2018) | Item | Period-end Balance (CNY) | | :--- | :--- | | Total Assets | 12,008,847,496.52 | | Total Liabilities | 4,936,056,171.85 | | Total Owners' Equity Attributable to Parent Company | 7,059,316,486.74 | Consolidated Income Statement Summary (January-June 2018) | Item | Current Period Amount (CNY) | | :--- | :--- | | Total Operating Revenue | 9,874,821,438.16 | | Total Operating Costs | 9,257,781,804.68 | | Total Profit | 651,309,374.49 | | Net Profit | 505,898,826.52 | V. Significant Accounting Policies and Estimates This chapter outlines the company's accounting standards and key policies for financial statement preparation, detailing revenue recognition for export and import businesses, and annual impairment testing for goodwill and other long-term assets - The company's financial statements are prepared on a going concern basis, adhering to Chinese Enterprise Accounting Standards, using the accrual basis and historical cost measurement[232][235] - Revenue recognition: Export business revenue is recognized when goods are delivered to the logistics company; import business revenue is recognized when customers sign for goods and payment is received or payment evidence is obtained[278][279] - Long-term asset impairment: Goodwill is tested for impairment at least annually, while other long-term assets are tested when impairment indicators exist[268] VII. Notes to Consolidated Financial Statement Items This chapter provides detailed notes on key consolidated financial statement items, highlighting significant increases in accounts receivable, inventory, and goodwill due to the U1Buy acquisition, and detailing sales expense components - Accounts receivable at period-end amounted to 1.554 billion yuan, of which 830 million yuan was from cross-border e-commerce business combinations, for which no bad debt provision is made[299][301] - Inventory book value at period-end was 4.513 billion yuan, with inventory goods accounting for the vast majority, and a provision for impairment of 133 million yuan made[317] - Goodwill book value increased from 1.125 billion yuan at the beginning of the period to 2.538 billion yuan, primarily due to the 1.414 billion yuan goodwill generated from the acquisition of Shanghai U1Buy E-commerce Co., Ltd. in the current period[351][352] Sales Expense Composition | Item | Current Period Amount (CNY) | | :--- | :--- | | Platform Usage Fees, Website Maintenance Fees, and Commissions | 1,006,260,142.13 | | Warehousing Fees, Logistics Fees, Freight, etc | 1,011,259,685.86 | | Advertising, Business Promotion, and Marketing Expenses | 668,652,888.73 | | Salaries, Social Security, and Welfare Benefits, etc | 241,095,537.70 | | Total | 2,993,513,315.75 | Section XI Documents for Reference This section lists all documents available for investor review, including signed financial statements and original copies of all publicly disclosed documents during the reporting period Documents for Reference This section lists all documents available for investor review, including signed financial statements and original copies of all publicly disclosed documents during the reporting period - Documents for reference include signed financial statements and all publicly disclosed documents from the reporting period, stored at the company's office[529]